3) Consider the following binomial option pricing problem involving a call. This call has two periods to go before expiring. Its stock price is $65, and its exercise price is $60. The risk-free rate is 0.05%, the value of u is 1.20, and the value of the d is .95. Construct the 2-period binomial tree model and find the value of the European call premium.

Group of answer choices

a) 9.82

b) 11.01

c) 10.05

d) 9.50

4) Consider the following binomial option pricing problem involving a put. This put has two periods to go before expiring.Its stock price is $100, and its exercise price is $110. The company expects to pay dividends after the first period. The dividend yield is 7%, the risk-free rate is 0.05%, the value of u is 1.15, and the value of the d is .90. Construct the 2-period binomial tree model and find the value of the European put premium.

Group of answer choices

a) 12.44

b) 11.02

c) 11.52

d) 12.02